Capital Structure, Shareholder Independence, and Performance of ASEAN Banks

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Arnat Leemakdej

Abstract

     This paper investigates the efficiencies of leading commercial banks in five ASEAN
countries, namely, Indonesia, Malaysia, Philippines, Singapore, and Thailand. The efficiency is
measured in terms of technical efficiency by the DEA framework. The regression results show
that Singaporean commercial banks lead the peers. Surprisingly, size of the banks impedes
efficiency despite the fact that most banks run at constant return to scale. To get more insight,
this study adds the shareholder independence indicator and concludes that shareholder
independence and equity are key factors to enhance efficiency regardless of the host countries.

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